Pros and Cons of USDA Allowing CRP Acres for Livestock Use

In a move to ease livestock feed supplies, U.S. Secretary of Agriculture Ed Schafer announced in late May that USDA will allow haying and grazing on land idled under the Conservation Reserve Program. Sign-up for interested CRP participants began June 2 at local Farm Service Agency offices.

The grass can't be cut or grazed until after the nesting season for grass-nesting birds. In Iowa the nesting season ends August 1. Only certain acreage enrolled in the CRP is available for haying and grazing for livestock.

Nearly 1.2 million of the 1.8 million acres of the CRP land in Iowa would be eligible for this critical feed use program. This modification for critical feed use is only for 2008 and all forage use must be completed no later than Nov. 10, 2008.

Landowners will have to pay $75

Landowners who have acreage enrolled in the CRP program will have to pay a $75 administrative fee for the right to cut grass or use it for grazing. However, the annual CRP payments they get from USDA on the acreage will not be reduced.

Grass can't be cut or grazed on conservation acreage that is in wetlands or filter strips along streams and ponds. So the Continuous CRP program is not eligible, just the regular CRP program.

Nationally, up to 18 million tons of forage worth $1.2 billion could be made available from program land, according to USDA. "This action will provide much needed feed and forage while maintaining the conservation benefits from the nation's premier conservation program," says Schafer. "Eligible farmers will be able to plan for harvest of forage after the end of the primary nesting season."

Acres will provide feed price relief

The CRP is currently keeping about 34.7 million acres of land nationally out of crop production. Some 2.6 million acres left the program in 2007, including 149,000 acres in Iowa, as contracts expired.

Prices for corn, soybeans, hay and other crops have advanced to record and near-record levels in recent months, reflecting strong demand, tight supplies and competition for acres. Increased demand for feed grain and resulting higher prices has hit the livestock industry hard.

More than 24 million acres of land enrolled in CRP will be eligible for this feed use program. USDA estimates the program will make available up to 18 million tons of forage worth $1.2 billion. "In authorizing this critical use of CRP acres for forage, USDA is also taking strong measures to preserve CRP's environmental benefits," says Schafer.

Decision is praised by some

Iowa Secretary of Agriculture Bill Northey praised USDA's decision to open 24 million of the 34.7 million acres currently enrolled nationally in the CRP.

"The decision benefits Iowa's livestock producers while maintaining the environmental benefits CRP provides," says Northey. "While the primary benefit will be for cattlemen, this forage has the potential to replace some corn that can be used by other livestock producers."

There is no doubt that the higher prices for corn and soybeans have impacted Iowans who raise livestock. This action along with USDA's recent announcement they are buying $50 million for the federal child nutrition and other food assistance programs is offering real help to producers."

Number of conditions to qualify

Some of the eligible land must be reserved for wildlife and any land that is used under this critical use feed authority must have a conservation plan. The most environmentally sensitive CRP land will not be eligible. The land will be subject to a site inspection to ensure compliance with the conservation plan.

While livestock producers are happy, most hay growers are upset with USDA's decision to open up CRP acres to haying and grazing later this summer.

"We're sympathetic to the livestock producer's economic situation with today's high feed costs," says Joe Hansen, a cash hay producer who also has beef cows in Lee County in southeast Iowa. "We need to keep the livestock people in business. But this CRP haying and grazing will compete directly with the commercial hay grower."

CRP release rankles hay growers

There are a couple of things he doesn't like about USDA's decision and its rules. "If the CRP forage was limited to producers to use for their own livestock feeding, that's fine. But if everyone can harvest it and sell it on the cash market, I take issue with that," says Hansen.

"Not only will livestock producers get free feed but also the CRP payment for not harvesting it. They are getting paid for the same crop twice. The government hasn't done that before. In fact, this is the first time CRP acreage has been released for harvesting on a nationwide basis."

Granted, it's not going to be quality hay. But it's going to make the poorer hay cheaper, says Hansen. Hay producers have already paid for fertilizer, preservatives, twine and other inputs. Now the low-quality end of the hay market will fall off in price, he says.

An explanation - the ABC's of the CRP

Under the CRP, farmer and landowners enroll eligible, environmentally fragile land in 10 to 15 year contracts with USDA's Commodity Credit Corporation. USDA's Farm Service Agency administers CRP on behalf of CCC.

Participants plant appropriate cover such as grass and trees in crop fields and along streams. These plantings help prevent soil and nutrients from running into streams and adversely affecting water quality. The long-term vegetative cover also improves wildlife habitat and soil quality.